Welsh Affairs Committee - Questions To The Secretary of State

Today the Secretary of State for Wales appeared in front of the Welsh Affairs Committee and I was able to question him on the replacement of the Energy Intensive Industries Compensation Package; steel procurement; and lessons for social services in England to learn from social services in Wales.

Stephen Kinnock: Thank you Chair. Continuing on the theme of steel and I was interested to hear you mention the Energy Intensive Industries Compensation Package Secretary of State. I wanted to raise a specific question around that. You will know that in the 2016 Budget there was a commitment for the Energy Intensive Industries Compensation Package to run through to next April 2017, at which point it was due to be replaced by exemption regulations so that we address the cause of the problem rather than the symptoms and the industry welcomed that, as you would recall. Now we were told that the regulations for making those changes would be laid in October, that hasn’t happened. We are now told it has been pushed back to December and it still hasn’t happened. We now have the industry therefore looking over the cliff at returning, in April 2017, to having to shoulder the full costs of the deeply un-competitive situation we are in, in terms of energy, because the money was only promised to 2017 and the regulations for exemption have not yet been laid. Can you please provide some reassurance to the steel sector that this is going to be resolved in double quick time?

Alun Cairns: Certainly steel is a priority for the UK Government, I should correct a number I gave a moment ago when I said £109m has been paid in compensation to the steel sector for the cost of it Energy Intensive Industries Package, it’s actually now £126m, it’s gone up since the last time I looked at the number. In relation to the specifics about the Order that you raised Mr Kinnock, I will happily write to you with the detail of it but certainly I met the Secretary of State for Business, Energy and Industrial Strategy last week to discuss the latest developments in the steel industry. We recognise the importance of the sector to the whole of the UK, the importance of the industry to the strategic interest to the UK, that covers so many important sectors and developing and supporting the sector of the industry specifically is something that we are working closely on and I will happily come back with the specific detail in which you asked for. But I am much more optimistic today than I was six months ago about the sector and I think that is a significant tribute to the people that work there and how they have turned around so many of the fortunes.

Stephen Kinnock: Thank you but it’s a little surprising that you met the Secretary of State for Business, Energy and Industrial Strategy last week and the issue of this cliff edge that we are facing on the exemption to the renewable obligation and feed-in tariffs wasn’t discussed. What did you discuss with him if you didn’t discuss that?

Alun Cairns: I didn’t say we didn’t discuss it, I said its work underway, we’ll be making an announcement shortly. I am encouraged by the positive outlook that we have towards the sector in light of the changes that have been brought about and the right of the UK Government policy as well as the Welsh Government policy and the workforce and the changes that have been made.

Stephen Kinnock: Well I look forward to receiving written clarification on that point. On procurement, we were told that all Government departments would, from Easter 2016, would keep records of the amount of UK steel that was being procured by their department. I subsequently sent written questions to every single Government department on the level of procurement of British steel and the response I received across the board was:

“The information is not centrally held in the format requested”

Can you please explain the discrepancy between what we were told in Easter 2016 and the current situation?

Alun Cairns: Well Mr Kinnock, I don’t know specifically what question you raised with each individual department and I’ll happily

Stephen Kinnock: It was ‘How much steel are you procuring within your departmental budget?’

Alun Cairns: Well I can give you some examples: Network Rail for example has 96% British steel within its programmes; Crossrail is almost exclusively British steel and it is the largest single project across the whole of the European Union; the Queen Elizabeth aircraft carriers 88% British steel. And in all of those examples that I have looked at there is always a good reason why British steel hasn’t been used. Usually because the speciality of individual steel types are not made in the UK and that’s when the steel will have been imported in order not for it to be much closer to 100%. But certainly I will happily have a look at the answers which you were given, but I hope you will also take confidence from the sorts of numbers that I have talked about. Because the procurement rules were changed in order to make it easier, as part of that package back in March, in order to put British steel in a much stronger position to win public sector contracts. And I would also say that in credit to the Welsh Government they followed the lead that the UK Government brought about at the time.

Stephen Kinnock: Well I just want to ask the Secretary of State, given that we’ve had a lot of news today over the crisis in social care in England, and given that in Wales council tax is £156 lower per year in Wales than it is in England, but we also spend 6% more on health and social services in Wales than in England, clearly something is going right in Wales where it is going badly wrong in England. I was wondering whether you might encourage the Secretary of State for Health to meet with the Cabinet Secretary to learn and understand more about why we are getting it right in Wales and perhaps this could be a good model for managing the system in England

Alun Cairns: Well from the position of council tax payers in Wales, I’m not sure they would subscribe Mr Kinnock to the situation you’ve have highlighted because you’d be well aware that there has been a pretty near zero increase in council taxes over the last five or six years in England, where there have been significant council tax increases of maybe 25% or more in some cases across Wales. So of course there’s the Department for Health and Department for Communities and Local Government regularly communicates with the Welsh Government and I am sure that there are good practices that each administration has to learn from the other.